The European Parliament on Wednesday approved the EU Commission’s proposal for an anti-tax avoidance directive aimed at multinational corporations, but said that stricter rules should be applied in many areas.
The anti-tax avoidance directive, issued by the Commission in January, would add EU-wide limits on interest deductibility, controlled foreign corporation rules, hybrid mismatch rules, a general antiabuse rule, an exit tax, and a switch over clause.
The MEPs approved the package, but said they wanted to go much further. Recommendations include stricter limits on the tax deductibility of interest; a common definition of terms such as patent box, tax havens, and permanent establishment; an EU blacklist of tax havens and sanctions against uncooperative jurisdictions; a stricter switch over clause, introduction of a common consolidated corporate tax base, and establishment of a new cross-border dispute resolution mechanism.
The Parliament resolution was passed by 486 votes to 88, with 103 abstentions.
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